Other big carmakers have already formed partnerships to develop cars that can drive themselves. Cruise, General Motor’s autonomous division, has gotten billions of dollars in financing from Honda and others. G.M. has put Cruise’s valuation at $19 billion.
Toyota has partnered in autonomous vehicles with Uber, the ride-hailing service. Luxury carmakers Mercedes-Benz and BMW have pooled their self-driving efforts. Several large automotive suppliers are also working on autonomous technology.
They face competition from well-financed Silicon Valley companies. Waymo, which is owned by Google parent Alphabet, has been working in the field for a decade and operates a test fleet of 600 self-driving taxis in Phoenix that it hopes to expand.
Estimates vary on how quickly cars will be able to operate without any human intervention, from a year or two to decades. For now, most of the self-driving test vehicles operate on public roads with one or even two safety drivers.
Founded in 2016, Argo has 500 employees and is operating test vehicles in Pittsburgh, where it is based, and Miami. Its chief executive, Bryan Salesky, formerly was part of the Google team working on self-driving cars. In 2017, Ford agreed to take an undisclosed stake in the company and invest $1 billion over five years. About 200 Volkswagen employees will join Argo.
Ford and Volkswagen previously agreed to cooperate in commercial vehicles for Europe and pickup trucks, and have said they were discussing cooperation in electric and autonomous vehicles.
For Ford and Argo, Volkswagen adds heft to the effort, said Mike Ramsey, a Gartner analyst. “Volkswagen is the world’s largest automaker by sales volume and has a huge global footprint,” he said. “The potential market for Argo technology is much bigger than with Ford alone.”
At the same time, Ford is scrambling to catch up in electric vehicles. The company hopes to introduce a slew of new electric models in the next few years. Using Volkswagen’s EV technology should speed the development effort. In April, Ford said it would invest $500 million in a start-up, Rivian, that is developing an electric pickup truck and sport-utility vehicle. Ford intends to use the underpinnings of Rivian’s vehicles to produce models of its own.